Ian Henschke: Very nice to speak with you too, and also we’ve got Vicki Thomson on the line as well, the Chief Executive of the Group of Eight universities, which includes the University of Adelaide, of course. And we’re going to just unravel some of the things that are going on at the moment in terms of education and training. Now, the mantra up until quite recently was all training is good training; more degrees are better for you. But Senator Simon Birmingham, you’ve got a bit of a different take on that now, haven’t you?

Simon Birmingham: Well, Ian, certainly all development, education, training that is of a quality nature obviously can enhance somebody’s capabilities. But we do need to make sure that where it is taxpayer-subsidised training, it is relevant to the likely employment prospects and growth in those employment prospects or career development of individuals so that taxpayers who are investing in that training are actually getting a return on it. And that’s why in redesigning the failed VET FEE-HELP scheme, we’ve had more of a focus on the skills and areas of the economy that appear to be most prospective for jobs growth into the future to ensure that taxpayer support is going into diplomas and advanced diplomas that are relevant to people’s career prospects.

Ian Henschke: So, you reckon taxpayer’s money was and is being wasted?

Simon Birmingham: Well, the data that we released today on the old VET FEE-HELP scheme shows that in 2015, up to one in five people who had enrolled to get student loans under that program were doing so for reasons other than their work or educational development. So, they were pursuing other sort of lifestyle-type reasons for study and that’s cost taxpayers around $500 million in student loans for people to pursue their interests and, of course, great for people to pursue their interests but probably not so relevant for it to be part of the education and training budget. We should be focused on skilling people to contribute to the economy, to create jobs of the future, and to create more wealth for all Australians.

Ian Henschke: There’s also something, if you drill down through what- the information that you’ve put out, that seems to suggest that public is not always bad and private is always good. In this case, it seems like public bad, private good, because you could do the same course with a TAFE for about $4000 that would cost you $20,000 – five times as much – if you did a Diploma of Building and Construction. Now, that strikes me as being almost extortion, doesn’t it, if you’re being charged $20,000 for a course that you could get for under $4000 at a TAFE?

Simon Birmingham: Look, this scheme that was set up in 2012 by the previous government unfortunately did lead to people who were shonks and rip off merchants entering the vocational education sector and offering courses at highly-inflated prices. And so the new program that we’re putting in place to replace Labor’s old model is one that has greater restrictions on the providers who can actually offer loans, greater restrictions on the courses that can be offered, and caps on the value of the loans so that we put some real downward pressure on prices in the future and ensure that the loans we’re offering better equate to the cost of delivery by the provider.

Ian Henschke: So that implies that the TAFE colleges were much better value for money and less inclined to rip both the student and the taxpayer off?

Simon Birmingham: Look, it certainly says that TAFEs in the main did a better job there. Not every TAFE; I’d highlight the fact that we saw still under the life of the VET FEE-HELP scheme around 300 plus per cent growth in the number of loans that TAFEs were issuing. Around $1 billion went to TAFEs, and some TAFEs around the country still had pretty poor completion rates, but the extreme price growth we saw was more evident in the private provider regime. But extreme price growth was only one of the problems. Others were those terrible … non- those terrible completion rates and, of course, the lack of relevance to employment of too many people.

Ian Henschke: Alright. If you want to stay on the line Simon Birmingham, I’d love you to stay with us for this discussion because Vicki Thomson’s joined us as well, the Chief Executive of the Group of Eight universities which includes University of Adelaide. And, Vicki Thomson, this is interesting. This is obviously talking about TAFEs and also private educators. The universities themselves have come under some criticism as well, and that is because they are probably training people who haven’t got jobs at the end of it. Now, what’s your response to that?

Vicki Thomson: Well, I think it is important to have that distinction, of course, between the subject matter that the minister’s talking about and the university sector. They are two separate sectors, although they are aligned, of course, because people who will go to TAFEs will often use that as a pathway to university as they should.

I think what we need to consider is the mix of skills that we require in an economy, in a state economy, in a national economy. And I’d certainly agree with the proposition that education, in any form, is really important for whomever chooses to do it. But we do need to look at the numbers of students who are coming into universities and the numbers of students who are perhaps choosing to do, you know, a trade certificate and we do know that the numbers of students coming into university has increased, and that’s a good thing, but at the same time as those numbers have increased, the number of students who are in vocational education and training has reduced.

And so, you do hear anecdotally – and I’m sure your listeners would have heard this – it’s very hard sometimes to get a plumber or a sparky or somebody to do the maintenance around the house, and you’ll always hear anecdotally the bartender or the barista who’s got an Honours in Law and they can’t get a job. And so I think people take those examples as saying there’s a fundamental problem within our university sector. I would assert there’s not a fundamental problem in that sense, because you have to look at what is a university degree- or what is a university there to do for you and it’s not necessarily there- there’s not a linear connection between going to university and getting the job that you thought that you would get. And that’s a little …

Ian Henschke: [Interrupts] But can I just stop you there, Vicki Thomson, because ultimately it’s the taxpayer who’s paying for that person to go to university and it’s a bit like what Simon Birmingham was saying before. He was saying some of these people are doing it as a lifestyle choice. Now, if somebody wishes to go to university and do, I don’t know, a law arts degree and there is no work at the end of that, why should the taxpayers support that? Even though they do, obviously, have a HECS debt at the end of it, it’s still a big outlay of many … probably, a couple of hundred thousand dollars at the end of the time that a person’s done a degree like that. I mean, shouldn’t there be some understanding of whether or not that person will get employment?

Vicki Thomson: Well, it wouldn’t be a couple of hundred thousand dollars, just on that point. But what we know now is the graduate of today will most likely have 17 jobs over five careers in their lifetime. So, the example of a law student, which we all seem to fall back on, a law degree now can open up so many different opportunities for you other than simply being a lawyer. But you may have a student who goes in there who is absolutely dedicated and committed to being a lawyer and there may not be a job for them at the end of it. But what you would hope that through a university degree you’ve done is you have given them the skills to be more generally employable and knowledgeable in the particular disciplines that they’ve chosen to study.

Having said all of that, Ian, there is no doubt that there has to be some responsibility as well for universities to ensure that when we’re attracting students into our universities that there are the jobs that are there potentially for them. So, it’s a bit of a fine line between I think raising expectations of students, and that’s not just an issue for universities. We’ve got students right now I think about to sit exams. The front page of The Advertiser today talked about the stress of students needing to succeed. You’ve got students who’ve got a lot of pressure on them thinking they have to go to university and they have to do a particular degree and then that will get them the job. So, I think there’s a kind of a bigger picture here that we need to actually look at.

Ian Henschke: Alright, we’re talking to Vicki Thomson, Chief Executive of the Group of Eight universities. A text just came in: what about those students who are seriously in debt from taking poor advice on further education, where the Government appeared to be encouraging them? We’ll put that back to the minister in a moment, but Dianne’s called in here on 891 Drive, and Dianne, you run a private provider of education, I understand, Dianne?

Caller Dianne: I certainly do, and I have done for 31 years. I conduct the Diploma of Beauty Therapy, and we have amazing outcomes for all of our students if they wish to get a job. I think we have to look at the disadvantage to women in this whole situation in that we could have two girls go to Year 12, pass beautifully, get both accepted into university. One may choose to go on and do Bachelor of Arts or Education or Law, and the other one who could have got into university has decided to go down the Diploma of Beauty Therapy and Spa Therapy route. And what’s wrong here is that the girl who goes to university and bless her, can actually access funding up to say, $100,000, but the girl now who chooses to come to me or to TAFE is only going to be able to access $10,000, And I think there’s something really quite wrong about that, that it’s not an even playing field, and you can’t say that everyone wants to go to university, and I have students currently who are studying at my college that started off at university and decided that it wasn’t really what they wanted to do. We have outcomes that allow our students to travel overseas and interstate with our diploma, and they do terribly well. The beauty therapy industry is huge; $999 billion a year around the world.

Ian Henschke: [Interrupts] So what’s your message to Senator Simon Birmingham, because he’s listening there on the line, and I’m sure …

Caller Dianne: [Interrupts] I know, and I think that’s really wonderful, and I’ve been speaking to his Department this week. I just want him to consult with industry. Yes, we want the cowboys gone. We really, really do. As a group of people, we want them gone, but we don’t want to open a walnut with a sledgehammer. Let’s consult with industry; let’s find out how we can all work together to make it better. But please don’t discriminate and disadvantage young women who now will not want to be able to go and do these studies. TAFE here in Adelaide for the same course that I run is between $24,000 and $27,000 so let’s not confuse people with $5000 of fees. That’s not actually correct. And I think we have to open conversation with [indistinct].

Ian Henschke: [Talks over] Alright. Well, I’ll pop that back to- alright. I’ll go back to- I’ll go back to Simon Birmingham. Simon Birmingham, sounds like you’re doing an audit of the entire system, and that includes the sort of things Vicki Thomson’s talking about, and also what Dianne’s talking about. Are you going to come out of this with a proper understanding, or will you crack a walnut with a sledgehammer?

Simon Birmingham: Well look, Dianne raises some very reasonable points there, and the first one is to recognise there are some very good private providers out there who for many, many years have provided high quality training with job outcomes for their graduates. So we want to make sure that they survive the transition into our new program. Our ambition in setting the loan caps is to try to align the cost of delivery roughly with the loan caps, so that we don’t have a situation where prices can be inflated well above the cost of delivery. We will of course take evidence …

Ian Henschke: [Interrupts] Okay. What about- what about her point that if you- if a young person chooses to go to a university, they get more help in a sense than if they choose to do a private provider’s course?

Simon Birmingham: Well, that’s not necessarily the case in that they get still annually capped amounts that are provided to support their studies there and those annual caps add up to more over the course of a three year Bachelor program than a one year diploma would necessarily add up to, and that’s not an unreasonable distinction. But actually, the type of levels of subsidies that apply are not too far out of the ballpark between what we’re proposing as caps in the VET space to what we allow as subsidies in the university space. But we want to make sure that it does broadly align with the cost of delivery, and we’re certainly taking evidence from the likes of Dianne and TAFEs and others to make sure that hopefully we’ve got that about right.

Ian Henschke: Alright. And Senator Simon Birmingham, just finally in regards to what Vicki Thomson said about people going to university, and they may do a law arts degree and spend five, six years at university and then come out at the other end and they have been educated for life. You happy with that?

Simon Birmingham: Well, we’re separately having a look at the higher education system, and again having a look at the efficient cost of delivery for university courses to make sure that universities don’t have distortionary incentives in place that encourage them to enrol more students in courses they can run at a profit and less in courses they might run at higher costs, but [indistinct].

Ian Henschke: [Interrupts] Okay, so you’re saying you’re having a look at everything, the whole- everything’s on the table to be looked at. Yep?

Simon Birmingham: Absolutely. Everything is certainly on the table, and we’re getting great cooperation from the university sector, and working through those issues. Of course, education is incredibly valuable, and we need to make sure that people are accessing it but they’re also encouraged to access it and supported by universities to access it in the areas of study that will give them the greatest benefit to their lives.

Ian Henschke: And just very quickly, Vicki Thomson. How many university students at the moment are getting jobs when they leave? I believe you’ve got some data on that.

Vicki Thomson: So in South Australia, the number of graduates in full-time employment is around 65 per cent after four months of graduating, and the number of those students who are looking for full-time employment and working part-time or casual is around 24 per cent for South Australia. And that is lower and higher than other states, which probably wouldn’t surprise your listeners, but certainly, a figure that we’d like to see change; no doubt about that.

Ian Henschke: So you’d like to see more employment, yeah.

Vicki Thomson: [Talks over] Well, six- we’d like to see more employment, absolutely. Sixty-five per cent is not a bad figure, but- and comparative to other states, it’s – I think WA or Queensland, rather, is the highest around 72 per cent – but that does mean that there’s another 24 per cent who are still seeking un- full-time employment and working part-time or casual. And that might be suiting some of those students. That may be a choice, as we’ve talked about previously. But similarly, there’d be a number of those students who would be looking for full-time employment in the degree in which they’ve graduated, and that’s a fair enough assumption for them to be doing.

Ian Henschke: Alright. Thank you very much for your time this afternoon, Vicki Thomson, Chief Executive of the Group of Eight universities. We’d like to talk to you again at some stage in the future about this, because obviously coming – as you say – the end of the year, a lot of young people are thinking about what they’ll do next year, so we’d like to have you on again. Thanks again for your time.

Vicki Thomson: Thanks Ian.

Ian Henschke: And also thanks to the Senator Simon Birmingham, Federal Minister for Education and Training.